Transcript How to Get Customer Satisfaction

How to Get Customer Satisfaction
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Defining Customer Satisfaction
Performance Measures of Service
Quality
Retaining Customers
Measuring Customer Satisfaction
Applying Customer Satisfaction
Customer Database
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Customer Satisfaction
Rule 1: The customer is always right!
Rule 2: If the customer is ever wrong, reread
Rule 1.
Stew Leonard’s Dairy Store
Norwalk, Connecticut
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Management 129
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Customer Satisfaction Facts
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Expectations = Performance (satisfied)
Performance > Expectations (extremely
satisfied, positive word-of-mouth, 1 will
tell 3)
Expectations > Performance (extremely
dissatisfied, negative word-of-mouth, 1
will tell 11)
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Management 129
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Customer Satisfaction Facts
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About 15% of those who are
dissatisfied would be impossible to
satisfy under any circumstances
Satisfaction is influenced by situational
factors (time, degree of inconvenience,
emergency)
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Management 129
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Performance Variables of Service
Quality
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Reliability - ability to deliver what is promised,
dependably and accurately
Responsiveness - willingness to promptly help
customers
Assurance - ability to convey trust,
competence and confidence
Empathy - individual attention to customers
Tangibles - physical facilities, equipment and
your own appearance
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Ten Deadly Sins of Customer
Service
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4.
5.
“I
“I
“I
“I
“I
don’t know”
don’t care”
can’t be bothered”
don’t like you”
know it all”
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Ten Deadly Sins of Customer
Service
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7.
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9.
10.
“You don’t know anything”
“We don’t want your kind here”
“Don’t come back”
“I’m right and you’re wrong”
“Hurry up and wait”
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The Good, the Bad, and the Ugly
There are no “bad” customers; some are
just harder to please than others.
Someone who never waited on a
customer in his or her life
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Customer Retention
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80/20 Rule
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80% of your sales will come from 20% of
your customers
Organizations lose 20% of their
customers each year
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Customer Retention
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$5 to attract a new customer, $1 to
retain an existing customer
1998 survey found “attracting
customers” was mentioned as a priority
twice as often as “keeping customers”
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Determining the Lifetime
Value of Your Customers
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What percentage of your customers do
you lose each year, fully or partially?
Do you know the average cost of each
lost customer?
What is the profit value of a loyal
customer over a lifetime? Lifetime
Value of a Customer (LVC)
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Determining the Lifetime Value of
Your Customers
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Profit Streams of Longtime Customers
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The better your customers know you, the
more they buy from you
The better you know your customers, the
better you can serve them
If you have loyal customers, you can
charge more
Satisfied customers provide word-of-mouth
advertising
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Determining the Lifetime Value of
Your Customers
Average customer $ per year
Average return on sales
Number of years average
customer stays with you
Profit from your average customer
How much average customer
increases orders each year
How much costs decrease each year
$ value of referrals each year
Price increase without losing loyal customers
Total
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Measuring Customer Satisfaction
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Satisfaction Surveys
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“To understand what John Brown buys,
you must look at John Brown through John
Brown’s eyes”
Questionnaire should be built on what is
important to the customer
Survey results need to be compared to
something (year, competition, industry
average)
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Management 129
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Measuring Customer Satisfaction
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Complaint letters
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Only 4% of dissatisfied customers write
letters of complaint
Between 55 - 70% of complaining
customers will buy again from you if you
respond quickly
The rate climbs to 95% if you respond
quickly and well
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Define Your Customers
Customer #1
Customer #2
What
Why
Who
When
Where
How
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What Matters to Your Customers?
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List the performance variables that cause
customers to buy from you.
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2.
3.
4.
5.
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What Matters to Your Customers?
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List the performance variables that cause
customers to buy from your competitors.
1.
2.
3.
4.
5.
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Determine What Must Be Done to
Retain Existing Customers
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Measure Customer Satisfaction
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List the customer satisfaction measures
that you take?
How often do you take each customer
satisfaction measure?
Interpret each customer satisfaction
measure.
Use the customer satisfaction information
to improve marketing performance.
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Determine What Must Be Done to
Retain Existing Customers
Measure
Frequency
Results
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How Used
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Determine the Lifetime Value of
Your Customers
Average customer $ per year
Average return on sales
Number of years average
customer stays with you
Profit from your average customer
How much average customer
increases orders each year
How much costs decrease each year
$ value of referrals each year
Price increase without losing loyal customers
Total
KelleyFall 2001 Marketing
Management 129
x
x
=
+
+
+
+
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